Political Knowledge and Policy Attitudes in a Racialized Economy

• In Event: Inequality, Race, and the Politics of the Fringe Economy

Abstract

Inequality scholars have demonstrated that personal experiences with financial insecurity shape economic policy attitudes. Further they show that these lived experiences often influence redistributive policy attitudes more than partisanship and other symbolic attitudes (Hacker, Rehm, and Schlesinger 2013). In this paper, I extend this line of inquiry by asking whether and how personal experiences with predatory industries shape regulatory attitudes and whether or not individual experiences are equally influential across different racial groups.

In this paper I theorize experiences with predatory industries as sites for political learning. Experience yields distinct political knowledge about how these businesses operate and why people use them. While borrowers see payday loan use driven by lack of options, the general public sees payday loan use as evidence of financial illiteracy (Baradaran 2011; Servon 2012). This political knowledge may facilitate different problem definitions, leading to different preferred policy solutions (Kingdon 1991).

However, scholars of race and political economy have provided a wealth of evidence for why we should expect that Black Americans have greater collective knowledge about the fringe economy than white Americans–racial wealth disparities, industry targeting practices, and patterns of racial and class-based segregation (Posey 2019, Small et al 2021, Faber 2018). As a result, I test a second hypothesis–that there will be a difference in political knowledge among white borrowers and non-borrowers, but not among Black borrowers and non-borrowers.

I test these hypotheses using data from an original survey of Black and white Americans that is stratified on whether or not respondents have individual experience with the payday lending industry. I conduct a multivariate analysis to test, first, whether individual experience is a better predictor of political knowledge and policy attitudes than ideology, racial attitudes, or beliefs about inequality. I then examine whether these relationships are stronger for white Americans than Black Americans, as hypothesized. While I find evidence white borrowers and white non-borrowers are more distinct in their political knowledge than Black borrowers and non-borrowers, the relationship between political knowledge and policy attitudes is less conclusive.

Author

• Rhea Myerscough, Butler University